Coke moves into North Korea

The first crates are loaded at a Chinese bottling plant

Coca-Cola, one of the classic symbols of American consumerism, has arrived in North Korea just three days after the United States lifted most trading sanctions on the isolated Communist state.

A truck carrying several hundred cases of Coke crossed in the country from its border with China on Thursday, said BC Lo, vice-president of Coca-Cola China in Hong Kong.

This constitutes the first step in building a business relationship

John Gustaveson, Coke spokesman

He dismissed suggestions that Coke was racing to be the first American company to do business with the North.

"We're just selling to one more customer," Mr Lo said.

"It's not a matter of beating anyone. We just want to do business."

The shipment is the first to North Korea under the company's direct supervision, although Coke has been exported there by the company's bottler since last September.

Cola war

The move means North Korea could become the newest front in the world cola war.

Coke has been a symbol of American consumerism

Coke's arch-rival Pepsi says it is also preparing a campaign plan for the sale of its products in the North.

However, Pepsi played down suggestions that it might lose out by failing to match Coke's initiative in entering the market so soon.

"Making a deal first does not necessarily mean a success in the North's markets," said Shin Hyun-seop, head of Pepsi Cola Korea Co.

Coke's move into North Korea is still limited. Mr Lo stressed that the company would not directly be doing business with North Korea.

Coca-Cola's external affairs director in Seoul, John Gustaveson, said the company had no plans as yet for establishing bottling plants or any other investments in the North.

He added that Coke drinks would only be sold in hotels and restaurants catering to foreign visitors.

"Once US sanctions are lifted, we move quickly," he said.

Famine

The US decision to ease its non-military trade embargo against the North followed last week's landmark summit between the leaders of North and South Korea in Pyongyang.

The moves follows the historic summit meeting between the two Koreas

The move is being seen as another example of easing tensions on the Korean peninsula.

But economists say the moribund North Korean economy will have to change dramatically if trade is to become at all profitable.

For years the North has been suffering the effects of a protracted famine caused by a combination of bad weather and mismanagement.

International aid agencies say between 2 and 3 million deaths have resulted.